Berkeley and Oakland voters are facing tax measures on the November 8th ballot that would affect homeowners and the quality of life in both cities by raising taxes on homeowners, landlords and business owners. We encourage you to read through the proposed measures as some, while working for the greater good of the community, could have unintended consequences for homeowners in both cities.
Measure U1 hopes to generate funds by increasing the business license tax on owners of five or more residential rental units and prohibits passing on the increase to most tenants. Measure U1 would raise business license taxes of rental property owners to between 1.8 percent and 2.8 percent, an increase of about $30 a month per unit, bringing in $4.5 million to $7 million annually for affordable housing
Proponents of this measure say that tenants are paying an extra $100 million a year, over and above a normal inflation adjustment, to their rent. The goal of the measure is to create more affordable housing over the next 10 years, but as much as these proposed measures hope to make housing more affordable, if licensing is too complicated or expensive, investors go elsewhere and the housing doesn’t get built in Berkeley.
Measure DD, backed by landlords, calls for a more modest increase on the business license tax: about 0.42 percent, raising about $1.3 million per year.
Measure DD prohibits landlords from passing the tax onto sitting tenants except when legally permitted, whereas Measure U1 prohibits passing the tax onto tenants regardless.
Both of the measures direct the tax revenue to the city’s general fund and could be used for any governmental purpose. Accounting for the administrative costs listed in the two measures, Measure U1 would add between $2.63 million and $3.1 million annually to the general fund, and Measure DD would add over $1 million in the first year and between $1.13 and $1.15 million annually thereafter.
Measure T1 authorizes a $100 million bond to renew city parks and failing critical infrastructure. Although bond money from Measure M (streets and watershed, 2012) and parcel tax money from Measure F (parks, 2014) have helped, more is needed.
According to the East Bay Times, Measure T1 is transparent about the costs to homeowners and it has been thoughtfully and responsibly prepared. For property owners, the resulting tax would average an estimated $90 annually for a home assessed at $425,000 and $128 for one assessed at $600,000.
The city has about $358 million of capital and maintenance needs, including street repairs, storm drains and needed improvements to buildings, parks and the marina. The bond measure addresses only the most urgent capital needs.
The goal of Measure E-1 is to support high quality public education and fund class size reduction, school libraries, teacher training, student support, music programs, instructional technology, and other designated purposes in Berkeley. A yes vote will give the Berkeley Unified School District the ability to replace its expiring special tax with an annual tax at 37¢ / square foot for taxable buildings, for eight years, with annual cost-of-living adjustments and a low-income senior exemption.
Renter’s Upgrade Act
- Owners must pre-petition for all increases above the annual allowable increase (CPI, currently 2%). No pre-petitioning for banking
- Just Cause will now include properties built before December 31,1995 (currently set at 1980).
- More power to the Oakland Rent Board
- Substantial rehabilitation has much more restrictive requirements.
The East Bay Rental Housing Association does not support these stricter measures on apartments that are already controlled. According to the EBRHA, “The layers of paperwork the average owner will have to go through to justify maintaining their property will have unintended consequences and cause harm to the fabric of our Oakland neighborhoods.” They maintain that to evict a resident can now run anywhere from $5,000-$25,000. Under Measure JJ, all single-family homes, condos and apartments will be covered by Just Cause. Extending Just Cause to thousands more rentals will place an undue burden on single-family, condo and apartment building owners.
According to the Oakland-Berkeley Association of Realtors, small landlords will be hit the hardest, which could cause blight in Oakland as property owners simply would be unable to pay for capital improvements on their properties and it disproportionately targets landlords.
Measure KK is an infrastructure bond, that if approved, would last 30 years and tax residents $70 per every $100,000 of assessed property value. This increase includes commercial, multi-unit and single-family dwellings. For an average property value of $900,000, that means another $630 per year for 30 years.
While property owners are responsible for this bond assessment, it will lead to the overall increase cost of living in Oakland, which has already gone up considerably these last 4 years. All businesses will be forced to look at increasing their rates of service to cover this increase.
Please remember to vote on Tuesday, November 8th. These measures are all very important and will have an impact on homeowners in both Berkeley and Oakland.